Magazine article American Banker

Security Pacific to Buy Chalmers Financing Division

Magazine article American Banker

Security Pacific to Buy Chalmers Financing Division

Article excerpt

CHICAGO -- Security Pacific Corp. plans to complement its legion of financial service offerings with the addition of the extensive equipment-financing business belonging to Allis-Chalmers Credit Corp.

Allis-Chalmers Corp. and Security Pacific signed a letter of intent for the nation's ninth largest bank holding company to acquire the Allis-Chalmers subsidiary.

The deal is for an undisclosed amount of cash and notes for essentially the book value of the credit division. Analysts estimate that book value to be between $182 million to $190 million.

Security Pacific, which has assets of $42.7 billion, will operate the company as a subsidiary of Security Pacific Business Credit Inc., a unit of its Specialized Financial Services Group of companies. The 290 employees of Allis-Chalmers Credit will remain with the subsidiary under new management, and the division's headquarters in Milwaukee will be made available to Security Pacific, an Allis-Chalmers spokesman said.

Security Pacific vice chairman William F. Ford called the acquisition a "prudent move. If you look at Security Pacific, we are as diversified a provider of financial services in a bank holding company environment as there is." The equipment-financing business will be an addition to the services the company's commercial group already offers, such as inventory financing, he added.

Allis-Chalmers Credit has assets of $1.3 billion, and analysts estimate the unit will have earnings of about $20 million this year. …

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